INJ 3.0: Key Features and Innovations
What is INJ 3.0?
INJ 3.0 marks the latest stage in the evolution of Injective's tokenomics. This upgrade is focused on significantly reducing the supply of INJ until Q1 2026
Beyond supply reduction, INJ 3.0 enhances the programmability of the ecosystem and strengthens its deflationary model, fostering the growth of decentralized applications and financial products
Why is Injective Unique?
Injective stands out among Layer 1 networks because:
- A portion of protocol-generated revenue is burned weekly.
- Deflationary mechanisms scale dynamically as the ecosystem grows
INJ Tokenomics and the Deflation Flywheel
Dynamic Supply:
More INJ staking leads to a higher deflation rate. Currently, over 50% of the total supply is staked, allowing the rate of supply reduction to accelerate over time
Burn Auction:
Each week, an auction takes place where participants bid using INJ to purchase a basket of tokens generated by Injective dApps. The highest bid wins the basket, and the winning INJ is burned, reducing the total supply
To date, over 6.38 million INJ has been burned
Simplified Concept:
Weekly auctions burn INJ, directly linking deflation to dApp revenue growth. More revenue means more tokens burned
How INJ 3.0 Enhances the Flywheel Effect
INJ 3.0 introduces a new framework for adjusting dynamic supply parameters, known as "Supply Rate Bound Tightening"
Key Adjustments:
Supply Rate Bounds: Defines the upper and lower limits for supply rate adjustments
- Rate Change Increase: Raised from 10% to 50%, enabling faster reactions to network activity.
- Quarterly Adjustments: Timed with Bitcoin halvings, supply bounds decrease over two years
-- Lower bound reduces by 25%, from 5% to 4%
-- Upper bound reduces by 30%, from 10% to 7%
A Deflationary Future for INJ
INJ 3.0 reinforces Injective’s vision of creating an ecosystem powered by sustainable tokenomics. With accelerated deflation and programmable supply mechanisms, INJ is positioned as a cornerstone for decentralized finance and Web3 applications
